Hasso Plattner of SAP (NYSE: SAP) and Marc Benioff of Salesforce.com (NYSE: CRM) squared off in a debate recently over which company has the best platform to run a company’s business.
The event, at the Computer History Museum in Silicon Valley, was billed as a debate over the future of enterprise software, although it never really tackled that question. Quentin Hardy of Forbes Magazine asked the questions and the two executives argued the merits of Salesforce.com’s on-demand platform and SAP’s traditional on-premise model.
Benioff, the chairman and CEO of Salesforce.com, was often faster on his feet than Plattner, an SAP co-founder and chairman of its supervisory board. A few times Benioff antagonized Plattner, who glared moodily off to the side.
“I want to figure out how to get SAP to build on our platform,” Benioff said. “They’ve had trouble getting into on-demand and they don’t have any major customers yet. So when I look at that I say, ‘How do I help them make it happen?’ They need to write their apps on our platform, because they’re never going to figure this out.”
“Don’t overestimate your platform; the ship can sink” Plattner said later. “I’d like to give you some advice, but I don’t know if you’ll take it, because you are a bit younger.”
The debate began calmly enough. Benioff said we are witnessing “the creation of a new enterprise software industry … built around some fundamental principles that are different from the previous era.” Those principles are embodied by Google, eBay and Amazon.com, he said, which deliver loosely coupled services, like Google Earth, which can be combined with other services to build solutions.
That is the model of Salesforce.com, which offers on-demand CRM and development services that customers can extend with services from third parties or extensions built in-house. SAP provides traditional ERP software to many of the world’s biggest companies, but it is slowly ramping up an on-demand effort called Business ByDesign, an ERP package for smaller businesses.
Plattner’s argument was that big companies are too complex to use “generic” services that are delivered ready to consume and can’t be customized for individual business needs. “We can’t really change the core of Google Earth,” he said.
SAP’s Business ByDesign is different, he argued, because it has 2,100 programming interfaces for connecting to other software. If Salesforce.com tried to extend its service to manage an entire enterprise system, Plattner said, “I will be scared to death.”
Benioff mocked SAP for losing out on a bid for chemicals company DuPont with SAP’s CRM Online, its first attempt at on-demand software.
“I’m not criticizing the moderator, but we don’t stick to the question,” Plattner grumbled.
“Why did they win Dupont? Because we had a shitty CRM system.”
“Forget about the little ill-fated CRM Online,” he said later.
“Your customers won’t forget about it,” Benioff quipped.
Benioff said enterprise software should no longer be only for big, rich companies, and said venture capitalists no longer write checks for software companies. “They’re all software as a service,” he said.
Plattner argued that Salesforce.com isn’t powerful enough to make its platform a de-facto standard, as Microsoft did with Windows.